Peregrine finds diamonds at Nunavut site

Mon Aug 25, 2008 2:59pm EDT
 
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TORONTO (Reuters) - Peregrine Diamonds has found diamonds at its six-hectare Chidliak exploration property in the northern Canadian territory of Nunavut.

The company, which also has properties in Canada's Northwest Territories and Manitoba, discovered the presence of possibly diamond-bearing kimberlite at Chidliak in July.

Peregrine said on Monday processing of a 94.9 kg (209 pound) surface sample had yielded 146 diamonds larger than 0.075 mm, while a 100 kg sample yielded 44 diamonds.

It also said it discovered a second outcropping of kimberlite -- or rock that often contains diamonds -- about 1.5 km (1 mile) from the initial deposit.

Peregrine said the discovery is 700 kilometers from the nearest known deposit of kimberlite.

The property is located about 150 km northeast of Iqaluit on Baffin Island, and has direct access to tidewater that connects to the Atlantic Ocean, the company said.

Peregrine's shares were up half a Canadian cent at 23.5 Canadian cents at mid-afternoon on the Toronto Stock Exchange, after earlier jumping as high as 25 Canadian cents.

Canada has four operating diamond mines,

($1=$1.05 Canadian)

(Reporting by Cameron French; Editing by Scott Anderson)